90% of homebuyers have historically opted to work with a real estate agent or broker. Here’s why that’s unlikely to change, according to the National Association of Realtors
BYTIM HUR
April 3, 2024 at 7:42 AM EDT
The National Association of Realtors has agreed to settle litigation over commission rules for U.S. real estate agents, clearing the way for possible changes in how Americans buy and sell homes.
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Last month, the National Association of Realtors announced a settlement that would resolve nationwide litigation over claims from home sellers related to broker commissions.
The $418 million settlement, and the practice changes it will usher in, have led some to speculate that real estate agents are at risk of becoming obsolete. As someone who has practiced real estate for 15 years, nothing could be further from the truth.
Members of the National Association of Realtors will continue to be the most reliable partner for the millions of Americans striving to realize the American dream through homeownership.
Specifically, the settlement will prohibit offers of compensation from being shared on multiple listing services (MLSs), the databases that show real estate brokers the properties for sale, and it will require MLS participants to enter into written agreements with their buyers.
These changes will go into effect in mid-late July 2024.
It’s important to note that the National Association of Realtors does not set commissions, and nothing in this proposed settlement would change that. Commissions would continue to be negotiable among buyers, sellers, and their brokers.
The “cooperative compensation” rule that has been subject to litigation says that selling brokers have to specify on each listing an offer of compensation to buyers’ brokers. That offer could be any amount, even zero.
Consumers continue to have options when it comes to compensating the brokers they work with. Some consumers may opt to pay a fixed fee for their broker’s services. In other cases, a seller may offer a concession on the sales price, which could be used by the buyer to help compensate their broker. And in other cases, listing agents may offer a portion of their compensation to buyers’ agents as long as the offer of compensation does not occur on an MLS.
Cooperative compensation, where the compensation a seller pays to their broker is shared, covering the cost of a buyer broker’s services, will continue to be an important option for consumers in all transactions and especially those involving lower and middle-income homebuyers, who may already have a difficult-enough time saving for a down payment.
The bottom line is that consumers will continue to be able to choose what kind of professional real estate advice they’d like–and how much, and how, they will pay for the work of a real estate professional.
Historically, nearly 90% of homebuyers have opted to work with a real estate agent or broker. That figure is unlikely to change.
Even in an era where seemingly everything can be researched and purchased electronically, the clear value added by realtors remains evident. Nine in 10 home buyers would use their agent again or recommend their agent to others.
Agents and brokers demystify local markets and neighborhoods and provide access to extensive information about available homes. We help prospective buyers determine realistic budgets and research varied financing options, including programs that may be able to help buyers with a down payment.
Seasoned agents and brokers also offer insights into property values, taxes, regulations, and zoning laws while overseeing thorough due diligence processes. And we connect buyers and sellers with other reputable real estate-related professionals such as lawyers, lenders, contractors, and inspectors–any of which can make or break a transaction.
When it comes time to make or evaluate offers, real estate professionals have a decades-long track record as skilled negotiators, ensuring that their clients submit the most competitive bids for their dream home–or hold out for what their home is really worth. And at the settlement table, we help our clients confidently close on what is likely the most significant financial transaction of their lives.
Even post-sale, real estate agents and brokers are crucial advisors for their clients, providing ongoing support, answering queries, and offering guidance as people confront the challenges and delights of homeownership.
NAR’s proposed settlement agreement and the associated practice changes will not change what makes realtors valuable: specialized knowledge, diligence, and a commitment to our clients’ best interests. And it does not change the fact that millions of people will continue to rely on us to help them fulfill their dream of homeownership.
Tim Hur is NAR’s 2024 REALTOR Party Community Engagement Liaison and a seasoned real estate professional with 15 years of experience. He is managing broker for Point Honors and Associates, REALTORS, a boutique real estate firm in Metro Atlanta.
Learn about the National Association of Realtors (NAR) and the lawsuit for equal cooperation clause and antitrust settlement for "pricefixing" as indicated in the NAR settlement
The case started with a main premise of not improving the industry but focused on price fixing. Use your own research to and discuss then call me for options for sale and purchase of your next home:
The case represented about 5,000 home owners saying that the "standard"(not true because all fees are negotiable ) was disclosed in the MLS for agents with some or much expertise and sellers ultimately paid the buyer broker without negotiation between that agent or brokerage as to competency.
80 jurors started the case with 8 chosen.
2 sold their home with and agent, 2 homeowners never used and agent and 4 were renters.
Thus 6 out of 8 had limited information on personal situations. Use your own determination if this was accurate to represent all buyers, sellers and value that their Realtor/Agent provided as of value.
See Mesothelioma and camp lejeune lawsuits and copycat ads requesting you to seek representation. Typically as consumer protection but isolates attorney as representative to a potential attorney, big payday.
https://www.youtube.com/watch?v=WjGo4--MtlQ
https://www.rismedia.com/2024/03/27/oped-debunking-myths-nar-settlement/?ct=1
Joe Biden told a blatant lie and no one fact checked him on the NAR settlement:
"Last week the NAR agreed for the first time that Americans can negotiate lower commissions when they buy or sell their home on a ...*lagging*... alone can save folks an average of $10,000 on the sale or purchase.
I'm calling on Realtors to follow through on lowering their commissions to protect homebuyers."
The President has furthered the incorrect claims that the recently announced settlement agreement allows Americans to negotiate commissions for the "first time".
This seems to be one of the biggest gaslight from the President when he says what they're doing is working to increase inventory and keep costs down.
White House telling us what to do with our commissions is laughable. While these politicians are making millions off insider trading with no repercussions.
Commissions have always been negotiable, it’s distasteful that he insinuates hard-working Realtors® are the problem for the housing affordability crisis.
Previously inflation was blamed on Russia - not the fact that the Feds have printed over 10 trillion dollars since COVID, not the fact that corporations are having historical profit margins since the money has been printed.
Instead it is us who are charging too much commissions… He probably doesn’t realize the average Realtor® only makes 40k a year (chuckles).
Oh I'm sure the home prices skyrocketing had nothing to do with improper quantitative easing due to pressure on the Feds from two parties and multiple administrations to get the "economy back on track" or "have record growth" or "record stock markets" etc.
If they hadn't kept our interest rates artifically low, we could have lowered the interest rates when covid hit instead of creating 80% of money in circulation in 3 years.
But yes, shift the blame to the people who are actually doing their job, so your constituents don't realize you are putting those houses in the hands of institutional investor AKA major donors.
I'm sure CNN, MSN, and the major news outlets will spread your misinformation since they are owned by those same institutions.
And “lower their commissions to protect home buyers”?
If buyers have to pay, many will just forego representation and call each listing agent direct, of any house they want to see. And buyers and sellers are being led to believe that said listing agents will handle both sides for only their side of the fee.
It is taking things back to before buyer agents existed, only worse now.
The White House says it will save buyers money on the purchase, when they didn’t normally have to pay an agent at all. So clueless!
Information not warranted, relay on your own research. **
What are your thoughts?,